Before the bell: Futures higher; stocks to extend rally (CSCO, CPS, JCP, SWY)

21 02 2008

Before the bell: Futures higher; stocks to extend rally (CSCO, CPS, JCP, SWY)

Posted by: in Latest News

Filed under: Before the bell, International markets, Earnings reports, Analyst upgrades and downgrades, Deals, Cisco Systems (CSCO), Market matters, Penney (J.C.) (JCP), Safeway Inc (SWY), Economic data, Federal Reserve

U.S. stock futures were higher this morning, looking to extend Wednesday’s rally following the Federal Resereve’s comments that the Fed’s focus should remain on helping the economy, even at the expense of inflation. Still, the As the Fed has lowered its economic forecast, it seems committed to spurring growth.

Stocks had another roller-coaster session on Wednesday. Stocks started the day with declines following further signs of inflation and a non-encouraging housing report, as well as oil trading near $100 a barrel. The market then reversed course, especially after the Fed released the minutes from the last policy meeting that indicated the Fed is ready for further rate cuts. That boosted stocks and they finished higher with the Dow industrial closing 90 points higher, or 0.73%, the S&P 500 adding 11 points, or 0.83%, and the Nasdaq composite rising20 points, or 0.91%.

Several economic indicators are due out this day.

At 8:30 a.m. EST, weekly jobless claims are due.
January leading indicators will be reported at 10:00 a.m., along with manufacturing in the Philadelphia region for February.

Oil prices held near $100 a barrel Thursday ahead of the government’s weekly report on crude inventories at 10:30 a.m. EST. Overnight, oil hit a record, pushing briefly past $101 per barrel, as investors poured more cash into crude and other commodities as a hedge against inflation and as possible rate cuts could further weaken the dollar. Precious metals such as gold and silver also hit records.

Overseas, Asian markets completed higher with Japan’s Nikkei 225 closing up 2.84%. Main European markets have also gained this morning, trading up around 1.5% even as the EU cut growth expectations.

Some companies reporting earnings this day include Safeway (NYSE: SWY), which is expected to report fourth-quarter earnings of 68 cents a share and J.C. Penney (NYSE: JCP), which is expected to report $1.74 a share.

In deal news, Reed Elsevier PLC, the owner of the Lexis Nexis information service, stated Thursday it will buy U.S. data services firm ChoicePoint Inc. (NYSE: CPS) for $4.1 billion in cash.

Citigroup has upgraded Cisco Systems (NASDAQ: CSCO) from Hold to Buy, upping the target price from $25 to $27. CSCO shares are up more than 2.6% in premarket trading.